PPC PROXIES OVERLOOKED
Minorities pick up on human error at Computershare
Human error at professional services company Computershare was responsible for the approval of two resolutions that would have awarded some of PPC’s (broad-based black economic empowerment (BBBEE) shareholders 4.4-million shares in cement company PPC at no cost.
The error was picked up by PPC minority shareholders who had voted against the resolution. They queried the outcome and a recount showed that 33% of shareholders had voted against the resolution. The 33% vote against the resolution was sufficient to block it.
Charles Lourens, the head of professional services at Computershare, said there was nothing sinister and that the mistake was down to human error. "There’s no excuse for it, but a block of proxies was not captured." He said the matter was raised after the meeting when minority shareholders realised something was wrong.
The affected resolutions were ordinary resolutions, which generally only need 50% backing, but because they involved BEE schemes JSE regulations require 75% approval.
At its initial count. Computershare calculated that just more than 76% of shareholders attending the meeting had voted in favour of the resolution and just less than 24% had voted against. This result was released on the Stock Exchange News Service on Monday evening. However, following complaints by minority shareholders, the shares were recounted and it emerged that Computershare had overlooked a block of about 293-million shares. This block of shares had voted against the resolutions, bringing the no tally to 33%. A second statement was released on Thursday.
Monday’s shareholder meeting was called to rescue PPC’s BBBEE scheme, which was substantially out of the money as a result of adverse trading conditions, management difficulties and the need for a hefty rights issue. The scheme was launched in 2008, just ahead of the global financial crisis. At the launch, the share price was expected to reach more than R66. After trading at just more than R30 for a few years, a boardroom battle at the end of 2014 saw the price slump to about R5, where it is now.
Shareholders were happy to amend the BBBEE scheme, but the 33% dissenting block objected to giving some of the affected BBBEE shareholders free shares with only a 12-month lock-in period. One of the minority shareholders who voted against awarding the 4.4-million additional shares said he accepted the need for a significant black shareholding but objected to giving some individuals free shares.